SÃO PAULO Indias Tata Steel Ltd. has shut its Rio de Janeiro office, which was used as a trading desk for export and import transactions.
The move was part of a global cost-cutting program at the Mumbai-based steelmaker, local market participants said. The company earlier this year had announced plans to cut staff in the Persian Gulf (amm.com, April 4).
But a Tata Steel spokesman denied the claims. The company has been "reconfiguring its export sales structure" and "focusing much more on sales of material made by Tata Steel" when selling outside its home markets, he said.
"These changes are not intended to reduce our sales to South Americarather the opposite," the spokesman said. "We will be reinvigorating our presence in South America through our representation in São Paulohandling our sales into Brazil(as well as) Lima, (Peru); Bogotá, (Colombia); and Panama."
The move implies that Tata Steel will reduce simple trading businesses in South America and focus more on selling its own material to the region.
The Rio de Janeiro office mainly handled imports of flat-rolled steel products from third parties to Brazilian customers, as well as imports of products in the oil and gas sector and some flat steel exports, local sources said.
Activities havent been affected in Mexico, where Tata Steel has an office focusing on imports of steel products made by the companys plants in Europe, sources said.
"It seems the impact was more on offices which acted as trading (companies)," one market participant close to Tata Steel told AMM sister publication Steel First.
A second source close to the company agreed. "They will be chasing longer-term business with select clients," he said. "This is the real purpose of the changes, and it would be wrong to characterize them as merely cost-cutting or as a reduction in their South American business."
A version of this article was first published by AMM sister publication Steel First.